Case Study : China 's Auto Industry Essay

Tesla Motors has the necessary advantage to maintain its business success in the next few years. However, as determined by the SWOT analysis, the company must deal with various issues to maintain its competitiveness and increase profitability. Tesla must improve its international influence. For example, new facilities and sales in high developing countries can boost business growth and meet Tesla's mission and vision. In addition, the company must continue to invest in R & D, and continue to innovate and produce technologically advanced products. The SWOT analysis shows that, despite the fierce competition in the global automotive market, Tesla may have enormous potential in the global automotive market.

maintenance and service. I can associate with this personally. I worked for Honda as a

The car market has been ran by companies such as Volkswagen, Toyota, Ford, BMW, and many other companies, but one of the newer, up and coming companies in this market is Tesla Motors Inc. Tesla has been around for a little over 10 years, and have come quite a long way from where they began. Tesla now sells luxury electric vehicles different than any other electric vehicles today, and they have big plans for expansion in the future. Tesla may not be one of the biggest car companies today, but one day they will be considered alongside companies such as Toyota and Ford.

content,” (Tesla Motors). According to the company website that’s more than most American vehicles as the Ford F-150 and Chevy Silverado pickup trucks. This shows that investors should look at Tesla Motors as more than a traditional auto company.

With the recovery of economy, the world’s automobile industry has been growing steadily over the past few years. According to Bloomberg, the US automobile sales climbed from its depth 10.4 million in 2009 to over 15.6 million in 2013. Furthermore, industry analysts predict that the sales will

The automotive industry as one of the world 's most vital economic sectors by revenue covers a wide range of businesses involved in the design, development, marketing, production, and selling of motor vehicles. A large proportion of this industry is focused on agriculture, especially farm machinery. Although quite often people consider farming as an old fashioned, hardworking profession, owing to the technologically advanced practices farmers invest much less effort and produce much more in the 21st Century (Wang, 2010).

First, on the market of semi and fully autonomous car adopters; in the short term, we expect auto manufacturers who produce premium semi-autonomous features to enjoy increased sales and brand recognition. Software makers, such as IBM, that process large volumes of sensor data and wirelessly connect cars will be a significant part of the value chain as well. Many technical, regulatory and governmental support uncertainties remain for fully autonomous cars. Second, for components suppliers and sensor manufacturers; the number of sensors and electronic devices in cars is increasing quickly, resulting in more revenue for sensor and component suppliers. For example, both Google and IBM are working with supplier continental to develop parts for autonomous cars. Third, rental, taxi and ride sharing businesses will converge with the robo-taxi model. The market size will grow substantially as more people move from car-owners to ride-sharers. The younger generation and older adults will be early adopters of the new

Tesla Motors Incorporated, an American company that designs, produces, and sells electric vehicles and their electric components, has become one of the fastest growing car companies in recent history. The company’s main goal was to start creating electric vehicles that were accessible and affordable to the public. Founded in 2003 and taking off successfully by 2009, Tesla Motors started selling the first mass-produced vehicle to use lithium-ion battery cells and hold a range of greater than 200 miles on just one charge. Along with building their own electric vehicle models, Tesla also builds electric powertrain components for vehicles from other automakers including cars such as the Toyota RAV4 electric vehicle. Tesla has begun to maximize

With the current trend of climate changes and rising oil prices it is believed that by 2020 five in every ten cars will be electric driven. The expansion of electric or hybrid vehicles could possible goes way beyond the expected just like the unexpected market rise for the Chinese bicycles. The market size for Chinese bicycles grew over 200 times the expected within a span of 10 years. The growth was something unexpected and greatly negated the earlier forecast that predicted a slow market growth. The same growth is likely expected for the new energy automobiles. For example, currently china records huge sales of new energy automobiles simply because the manufacturer sells the products at consumer friendly prices. Majority of its ultra-low priced electric vehicles trade at roughly $4000,

Also, there are inherent underlying social and cultural attitudes that keep people from owning automobiles in some parts of the world. Many nations are not as spread out or as mobile as the U.S.; they are constrained either by geography, race, class, or religion and the need for personal transportation is not as great, yet. The American dream of “a car [or two] in every garage” is not what the rest of the world currently wants or needs. However, the marketing arms of the global automotive manufacturers are certainly working very hard to change this paradigm, and with unprecedented production volumes world wide, all signs indicate that they are succeeding. Most with the ability and means to own a vehicle, who live in a society with the necessary infrastructure (e.g., roads and

challenges, however, are the most difficult ones to face and overcome. Some environmental issues that

One of the main political factors facing Tesla in the US are the incentives offered by different states and cities to Tesla owners. They must co-ordinate with these policy makers and inform the consumer. In China, the key political factor is that “the Chinese government wants to put around 5 million electric or plug-in hybrid vehicles on its roads by 2020, but to date reports have confirmed that there are a mere 70,000 electric vehicles plying on China’s roads. In order to promote EV sales, the government has set a target that 30% of government vehicles purchased by 2016 should be EVs. To reach the target set for 2020, the Chinese government is ready to fund nearly $16 billion to build electric charging stations. To further promote EVs among Chinese car buyers, the government is looking to impose a new tax on gasoline engines and has renewed the private-buyer subsidies for electric-powered vehicles for another three years.” (GuruFocus. 2014.

Tesla Motors designs, builds, and sells luxury electric cars across the planet. Their company mission statement is to “accelerate the world’s transition to electric mobility with a full range of increasingly affordable electric cars” (Tesla site). The business has become a major marketing success story; they have payed off all debts and returned a profit in 2012. Elon Musk, a founder of Tesla Motors, created the business on a very strong product marketing plan. Their products would appeal to wealthy people who wanted the luxury and convenience of a premium car without taxing on the environment. Now that Tesla has started to rise up economically, they will start to create cheaper more affordable electric cars for the middle class people. With this, Tesla will be able to achieve their mission by implementing various features in their products such as, long range batteries, faster engines, and affordable electric cars.

Tesla insertion to the automobile industry had to face a challenging atmosphere. An industry with a wide number of competitors, who have been in market for several years earning the consumers trust, and where all the different niches have been exploited, from the low cost models to the luxury ones.

However, due to its unique targeting strategy, it has not win compatible brand recognition among the public. Although Audi enter much earlier than BMW and Benz in the luxury car market, its marketing strategy limited increase of public brand recognition even Audi has over 100 years’ history. Besides, although its styles are highly accepted by the targeting customers, there are a growing number of people who can afford luxury cars for family use in China. Lack of vitality is limit of its further market expansion. On the contrary, its major competitor in China, BMW, has launched a series of marketing strategies to promote its high-performance, manoeuvrability, as well as stylish design to attract young people (BMW, 2009) in order to expand its market share. Therefore, although Audi has achieved success in the targeting market, it may consider further development through diversification in product line and advertising campaign.